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Former Silicon Valley fintech star acquired at a valuation halved, while stablecoin rising star turns down a hefty offer from payment giant

Hello everyone, welcome to a new episode of 'The Fuzzy Lion of Sand Hill Road.' In this episode, I want to walk you through two major news stories from last week: both related to M&A (mergers and acquisitions), but in completely opposite directions.

The first piece of news comes as a surprise to many: Brex has been acquired by Capital One for $5.15 billion. The second piece of news, however, goes in the opposite direction: Zero Hash rejected a $2 billion acquisition offer from Mastercard, choosing to remain independent and seek its next round of funding.

Strictly speaking, these two deals are not in the same space: Brex leans more toward traditional fintech, even bordering on the banking ecosystem; Zero Hash, on the other hand, is infrastructure surrounding the 'orchestration layer/processing layer' for stablecoins.

But when viewed within the context of broader current trends, they are essentially telling the same story: stablecoins are becoming the new foundational infrastructure for fintech and banking; the regulatory framework is also forcing the industry to re-stratify and re-price itself. And these two deals happen to be examples of this kind of 're-pricing.'

Let's break it down step by step.

1. Capital One acquires Brex: A big deal, but not friendly to the seller

At first glance, $5.15 billion is certainly a large deal. But if you place Brex back in the context of that wave of Silicon Valley fintech hype during the pandemic, this price isn't particularly 'shiny.'

During its valuation peak in 2021–2022, Brex was valued at over $12 billion. Now, with the deal closing at $5.15 billion, it represents a significant discount from its peak, which can be understood as more than just a '50% cut.'

More crucial is the structure of the transaction. Public information shows that this acquisition is split evenly between cash and stock: approximately $2.75 billion in cash plus about 10.6 million shares of Capital One. It just so happens that Capital One’s stock price was near its all-time high earlier this year. In other words: it’s very advantageous for the buyer to use their high-priced stock as payment; while the seller, receiving half in stock, naturally assumes more volatility.

So, looking at the term sheet, this deal's 'unattractiveness' lies not only in the discounted price but also in the unfavorable structure. For the seller, it is indeed an unfriendly combination of terms.

2. Brex’s valuation multiples: Why didn’t the market price it as a 'platform-type SaaS?'

Next, let's move on to the second question: What multiple does $5.15 billion actually represent?

Brex’s revenue structure is highly complex: it includes interchange fees from card transactions (a cut of transaction fees), interest margin gains from cash management, software subscription fees, forex, and more.

As a private company, it doesn’t disclose information as clearly as publicly traded companies do, so media and markets often mix up net revenue, gross revenue, and run-rate (annualized revenue).

One common public estimate in the market is that Brex’s revenue or annualized revenue for 2025 will be around the $500 million mark. If we divide $5.15 billion by that, it comes out to roughly 10 times revenue.

If you view Brex as a 'pure SaaS/platform company,' 10 times isn’t particularly impressive. This is vastly different from the valuation logic during its previous funding round when it was valued at multiples of dozens of times ARR.

This indicates a very pragmatic assessment: Capital One didn’t value Brex as a SaaS platform but rather treated it more like a traditional corporate financial gateway. What banks prioritize is its ability to bring in new corporate clients (especially tech firms and higher-quality customer segments) and the associated capital deposits, compliance constraints, and opportunities for cross-selling. This is a very 'bank-like' approach to valuation.

Third, transitioning from SMBs to enterprises: How does Brex’s strategic choice reflect today’s discounted valuation?

Here, I would like to look at Brex’s acquisition alongside a pivotal decision made in 2022.

Many people still remember: In 2022, Brex made a decisive strategic pivot—shifting from serving traditional small- and medium-sized businesses (SMBs) and ventures to focusing more on enterprise-level clients. This decision might have led to two short-term outcomes: higher average revenue per client and easier profitability balancing.

However, in the long run, it could also have another side effect: the breadth and growth momentum of SMBs weakened, and the brand image shifted from being universally accessible to becoming more of a niche corporate financial tool. When you put this into the context of today’s M&A pricing, it becomes clear: when user growth and ecosystem expansion are no longer continuously validated by the market, valuations are more likely to revert to traditional financial multiples.

Meanwhile, let’s look at Brex's competitors: Mercury and Ramp have instead doubled down on their strategy of growing alongside SMBs and Ventures. This “sticking to the core market” approach will create a clear divergence in their reputation and growth narratives going forward.

4. Founder Mindset and Product Cadence: The Reputation Gap Between Brex and Ramp

When it comes to Ramp, I have to mention a less 'financial' variable: the founder's product mindset and execution pace.

If we go back to the early days, Ramp didn’t enjoy the same PR and exposure advantages as Brex and Mercury. However, over the past year, I’ve seen Ramp being extremely aggressive with its product moves. Listening to its founder on podcasts or interviews, you can feel that intense focus—thinking clearly, executing swiftly, iterating rapidly, and continuously pushing for better experience and efficiency.

On the other hand, having attended some of Brex’s founders’ online events and interviews myself, I got the sense that their focus is more on grand narratives, personal branding, and industry influence rather than sweating the small details of product development day by day.

When it comes to reputation within the industry, Brex has indeed gradually widened the gap with Ramp over the past two years.

Such gaps become magnified when the valuation environment turns cold: capital no longer pays for 'stories' but only for consistently verifiable products and growth.

5. Ramp’s 'Breakout Move': Fully Embracing Stablecoins and Replacing Rails

One of Ramp’s most 'breakout' moves over the past year has been its attitude towards stablecoins—not just dipping its toes in, but fully embracing them, using stablecoins as the underlying rails.

Following Stripe’s acquisition of Bridge in May last year, Stripe rolled out capabilities like stablecoin-backed cards and global accounts. Among the first batch of heavyweight partners announced by Stripe was Ramp.

For Ramp, this means that its global corporate clients on the platform—such as merchants doing cross-border business in Africa or engaging in cross-border e-commerce on Amazon—can open global accounts, issue global corporate cards, and conduct cross-border settlements using the underlying capabilities of stablecoins. This brings about two types of changes:

The first is the cost structure: the costs for global account settlement and fund processing could be lower and more controllable.

The second is the growth structure: when the underlying infrastructure shifts to stablecoin rails, its logic for acquiring customers and expanding globally is no longer entirely constrained by the friction and boundaries of traditional financial infrastructure.

This is also why Ramp is more readily understood by the market as a “platform” rather than a “fintech tool that functions more like a banking gateway.” When you look at the numbers together, the contrast becomes stark: Ramp’s reported valuation once reached $32 billion with revenue of around $1 billion, implying a multiple of approximately 30x; whereas Brex was acquired at about a 10x multiple, a gap that feels almost like two different worlds.

But this also raises a key question: Ramp’s ability to use stablecoins as the underlying rails heavily depends on the capability of the “orchestration layer” of stablecoins. This naturally leads us to our second main character: Zero Hash.

6. Zero Hash: The confidence to reject acquisition offers stems from being a “distribution gateway” and having “institutional endorsements.”

Zero Hash’s positioning is similar to Bridge and BVNK: all are middleware/infrastructure serving as the stablecoin orchestration layer. In the past, common outcomes in the market were either that the orchestration layer got acquired by giants (e.g., Bridge being acquired by Stripe) or got strategically revalued during acquisition talks (e.g., the rumored but failed acquisitions of Zero Hash by MasterCard and BVNK by Coinbase).

What makes Zero Hash’s dynamics more interesting is that around the time it was reported to have “rejected acquisition offers,” it announced several high-profile partnerships, making its confidence appear more like having real leverage rather than being purely driven by sentiment.

1) Gusto: Stablecoins entering mass-market payroll scenarios.

The most critical turning point was its partnership with Gusto. Gusto is one of the leading platforms in the U.S. payroll sector. One important driver for stablecoins finding early product-market fit (PMF) in the Global South (developing countries) was the globalization of hiring by U.S. tech companies post-pandemic: a large number of positions exist as contractors rather than local full-time employees.

Contractors in many countries face relatively fewer compliance constraints and benefit from more flexible payment methods, providing significant growth potential for stablecoins. For contractors, 'receiving payments in stablecoins' often means quicker access to funds and less friction.

In this context, if payroll platforms like Gusto make stablecoin payouts an option, the significance goes beyond 'a new payment method.' It means stablecoins are entering high-frequency, essential mass-market scenarios: salary disbursements.

For Zero Hash, being able to integrate with a platform like Gusto represents not just quantitative growth but also a qualitative shift: stablecoins are expanding from 'exchange settlement and speculative scenarios' to 'scenarios closely related to ordinary people's income and company operations.'

A more intuitive comparison is as follows:

The partnership between Deel and BVNK disclosed that the scale of stablecoin payouts involved approximately 10,000 contractors across over 100 countries.

The collaboration between Remote and Stripe/Bridge reported USDC payouts covering contractors in about 69 countries.

Gusto’s public data shows over 400,000 small business employers, spanning more than 120 countries.

Even though these three platforms have different focuses (Gusto is more payroll-centric, while Deel/Remote also provide heavier operational services like EOR), in terms of 'coverage and distribution density,' Gusto’s platform characteristics are indeed closer to the mass market.

It’s no wonder that around the time Gusto announced its partnership, rumors began circulating that Zero Hash had 'ended acquisition talks to remain independent.' The company did not publicly confirm that the decision was due to Gusto, but the timeline alignment makes this inference more plausible.

Morgan Stanley (E*Trade) and Interactive Brokers: Cementing the label of 'compliance intermediary layer'

In addition to Gusto, Zero Hash has two very significant partnership leads, giving it the appearance of being a 'compliant intermediary layer that traditional financial systems can trust.'

The first is Morgan Stanley: By leveraging Zero Hash’s infrastructure, crypto trading will be launched on E*Trade, under Morgan Stanley, with the goal set for the first half of this year. The initial assets include BTC, ETH, and SOL. This extends Zero Hash's endorsement from being crypto-native to now encompassing traditional financial giants.

The second is Interactive Brokers: Users can fund their brokerage accounts 24/7 using USDC through Zero Hash, with wallet and conversion routing provided by Zero Hash. It is also expected to expand to Ripple’s RLUSD, PayPal’s PYUSD, and others. This move is even bolder: stablecoins are no longer just a 'payment tool' but have become an entry point for funds into financial accounts.

When you put together the three lines of E*Trade, Interactive Brokers, and Gusto, you realize that Zero Hash has been pushed into a larger, more mainstream money flow system. For an orchestrator, such distribution and endorsements are themselves a source of 'independence premium.'

Seven, the ceiling and true value of payroll: It is not infinitely large, but it is hard enough

It is also important to clarify the limits of payroll: currently, the payroll that stablecoins can penetrate mostly remains within the cross-border contractor segment. In many countries, formal local employee wages still cannot be paid in stablecoins or cryptocurrencies. It is likely that, in the overall payroll market, stablecoins will only capture a relatively limited proportion in the short term.

However, the value of payroll lies not in being 'infinitely large,' but in being 'hard enough': high frequency, essential demand, extremely high migration costs. Once stablecoin rails enter payroll, they cease to be a 'new payment method' and instead solidify as operational infrastructure. Securing this space means securing a long-term, stable, and sustainable cash flow entry point.

Eight, finally, putting the two deals back into the regulatory context: The tug-of-war over CLARITY is precisely the underlying logic of 'banks dare to buy, infrastructures dare to be independent.'

At this point, the regulatory context must be brought in to connect the two deals into a causal chain.

Currently, one of the biggest points of contention between traditional finance and crypto is the stalled and under-negotiation CLARITY Act. Recently, there has also been a version proposed by the Senate Agriculture Committee, but market feedback suggests its passage potential is slimmer. More effort remains focused on how to advance the main bill and reach consensus among Coinbase and other stakeholders.

My intuition is: banks will not completely give up their own interests.

This also explains two things:

First, why Capital One, as a bank, dares to pursue mergers and acquisitions for expansion at this time. If regulators tightly control the returns on stablecoins, it becomes more advantageous for banks to defend their funding moat. Banks are then more willing to invest their acquisition capital into 'enterprise entry points' rather than betting on other new strategies. Brex was acquired as a funding entry point, following a logic similar to 'acquiring another bank.' From the buyer's perspective, this is a very cost-effective deal.

Second, why infrastructure providers like Zero Hash are more likely to be adopted by mainstream finance as an 'intermediary layer connecting to on-chain finance' when regulations become clearer and emphasize compliance and control. Non-speculative use cases such as payroll processing reduce the suspicion of 'regulatory arbitrage,' making it easier for these solutions to expand within mainstream systems. For Zero Hash, this creates a favorable condition for independent growth.

Nine, Epilogue: Different perspectives lead to different evaluations of the same event.

Finally, I’d like to add a less ‘cold’ perspective.

I’ve seen many venture capitalists comment on Brex’s acquisition, and most of their views lean toward support and understanding. Many VCs have accompanied Brex and Zero Hash through both high valuations and low points, so being able to exit gracefully at a multi-billion-dollar scale, with a reputable company like Capital One as the acquirer, is considered an honorable outcome for the founders.

On the other hand, Zero Hash choosing not to sell but instead pursuing a longer, harder path that might eventually lead to an IPO would evoke mixed feelings among VCs: The same event will naturally receive different evaluations due to differences in stakeholder interests and values.

I personally feel deeply connected to this. A company I’ve been advising for a long time is currently going through the acquisition process. When I first met the entrepreneurs a few years ago, they were still in the pre-seed and seed stages, sketching out ambitious visions. But reality is, industry regulation and policy environments don’t always favor you. Being able to secure a relatively good valuation during a certain window period, along with a reasonable cash-and-stock acquisition offer, makes me genuinely happy for the founders from a place of empathy.

Business is business, and life is life. The ones truly bearing the daily ups and downs, pressure, and uncertainty are the founders themselves. Just the other day, there was a viral meme showing a founder climbing a building like Alex scaling Taipei 101 with bare hands, while spectators inside the building took selfies, captioned 'Founder vs VC.' While exaggerated, the emotions depicted are very real.

So whether it's Brex being acquired or Zero Hash rejecting a merger and choosing independence, I prefer to interpret it as: these are the best answers they could come up with under the current conditions.

Conclusion

That’s all for today. We will continue to monitor the progress of the CLARITY Act and how it impacts the next wave of mergers and acquisition trends versus independent paths in fintech and stablecoin infrastructure. If there are new key developments, I'll keep updating and analyzing them with you.

See you in the next episode.

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